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Alliance Bernstein Holding LP (AB – Free Report) has been granted a license to operate a wholly owned mutual fund business in China. This news was reported by Reuters.
“Alliance Bernstein provides onshore investment products and solutions to Chinese investors and helps them explore opportunities in China’s domestic market,” the company said in a statement posted on its WeChat account.
This makes AB the latest foreign asset manager to tap into China’s $3.8 trillion mutual fund market.
Notably, in 2020, China lifted restrictions on foreign ownership in the mutual fund industry.
In response, several global banks are rushing to take advantage of this favorable outlook. The country has become the world’s preeminent stock market, with one of the broadest and deepest growth markets outside the United States.
In particular, companies that: JP Morgan (J.P.M. – free report) and goldman sachs (G.S. – Free Report) has expanded its business in China.
JPMorgan and Goldman received approval to own 100% of the domestic securities joint venture in August and October 2023, respectively. Additionally, GS and JPM are planning domestic expansion to diversify their revenue and expand their global footprint and market share.
However, China’s mutual fund industry is facing headwinds, with the market expected to post its third consecutive year of losses in 2023. Foreign players are also grappling with challenges such as geopolitical risks and China’s efforts to strengthen data security.
Therefore, AB’s efforts to enter the Chinese mutual fund market demonstrate foreign investors’ confidence in the Chinese capital market.
AB stock has increased 0.6% over the past three months, compared to the industry’s 19.9% rise.
AB currently carries a Zacks Rank #3 (Hold).You can see See the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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